Working with performance indicators is not a new practice, but many companies still don't know exactly how to implement them. KPI management in the organization's day-to-day operations.
The acronym KPI comes from the term Key Performance Indicator and it relates to the data that is relevant to measuring the performance of a process and those involved in it.
Indicators allow managers to measure what is working well or not in all company processes, identify problems, and establish solutions to optimize work.
Establishing a KPI management system also allows track employee goal attainment, and helps them prioritize tasks and understand their responsibilities within the organization.
Read also: “How to create a KPI tracking culture?”
If you recognize the advantages of implementing this management in your company, but don't know how to do it, follow these steps:.
Align the indicators with the strategic plan
It is fundamental that every company has strategic planning guiding its actions to achieve specific objectives. It is through this planning that employees understand their roles and how processes will add value to the organization's products and/or services.
In KPI management, it is necessary to fully understand the strategic objectives so that they are translated into goals aligned with them.
Set realistic goals
The goals based on strategic planning need to be relevant to the business, measurable, and realistic, so that it's possible to establish a timeframe for them to be achieved and, from there, choose the KPIs that will be monitored.
Choose the KPIs
After having established goals, it is necessary to know how to measure whether the company is moving towards success or not. The indicators performance metrics are intended to measure the performance of the process to which each goal refers.
The main tip for guiding the choice of indicators is that they cannot be difficult to measure. It is worth remembering that they should focus on tasks that add the most value to the production chain.
It is not recommended to set an exaggerated number of Key Performance Indicators, a maximum of five for each process. It is also important to indicate who is responsible for the performance of the KPIs, whether it is a person or a department.
See also: “The success indicators you can't lose sight of when managing projects”
Monitor the processes
The next step is to track the performance of the processes to verify if the performance is within expectations. The KPIs need to be constantly measured and monitored, so that any deviations they be perceived and measures be taken.
Fix the flaws in your KPI management
A KPI below the target is a signal that an intervention needs to be made for performance to return to the desired level. To this end, the causes must be evaluated so that the correction addresses the root of the problem.
Continuously seek improvement
One of the main purposes of KPI management should be continuous improvement in processes, even if the performance goal is being met.
Investigating the occurrence of delays, bottlenecks, and waste is a way to optimize processes and achieve ever-higher performance levels.
It's important to remember that KPIs need to be authentic, based on data reliable, to the point of guiding the company to the best decision-making. The idea is that the company does not remain static, but takes steps forward with the implementation of management.
Depending on the type of organization, KPIs need to be aligned with standards such as ISO 9001 and PBQP-H, for example. This means the task will not be as simple as it seems.
Indeed, implementing a culture of manually monitoring KPIs requires a lot of work, involving the creation of formulas and charts, a data collection process, and even jeopardizing its reliability. However, there are currently specific software solutions on the market that facilitate this implementation.
If you are interested in learning more about Stratec's systems, please contact us. It will be our pleasure to present our software and offer your company a free demonstration!
